Blackouts rack S. Africa

Robyn DixonTimes Staff Writer

Across Africa, people know what to do when the lights go out: Life chugs along thanks to generators, candles, wood fires, paraffin lamps and windup radios.

But South Africa prides itself on being a kind of "older brother" in sub-Saharan Africa, more modern, more industrialized and richer than the rest. So the blackouts that are paralyzing the continent's biggest economy for several hours a day have led to an undercurrent of soul-searching: Does this mean we have the same problems as the rest of Africa?

In a nation with infrastructure more developed than in the rest of the region, the outages hit hard: Complicated heart operations have come to a standstill, and intensive-care nurses have had to ventilate patients manually. Winemakers can't keep vats of fermenting grapes at a constant temperature, endangering their entire harvest. At one point, hundreds of tourists were stranded until almost midnight on an aerial tramway at scenic Table Mountain in Cape Town.

But perhaps nothing brought home the scale of the crisis like the government power utility Eskom's warning to foreign investors with millions to sink in big industrial and mining projects: We don't want you here until at least 2013, when new power stations will be built.

"I think the damage is huge . . . and now South Africa looks just like Africa. Maybe it will take 20 years to recover," said Trevor Gaunt, professor of electrical engineering at the University of Cape Town, who was part of an expert panel that warned the government about the impending problem in 2000.

The power crisis amounts to the most critical economic misstep by the ruling African National Congress since President Thabo Mbeki succeeded Nelson Mandela nine years ago, and occurs at a time that South Africa is facing considerable political uncertainty because of an intense rivalry between the two factions of the ANC. When Gaunt's panel warned that demand for power would exceed supply by about 2006, Mbeki's government ignored it.

"People didn't want to hear it," Gaunt said in a phone interview. "If politicians had heeded the message of specialists instead of taking political decisions, we could have avoided this."

As the "engine room" of Africa falters, some are warning it could drag the whole southern African region down.

Dozens of mines, part of the country's most crucial industry, have had to shut down for days at a time because there is no guarantee of power to evacuate miners. Other heavy industry such as petrochemical giant Sasol also have had to stop work. Millions of dollars have been lost in dairy and egg production.

And in one of the world's worst crime capitals, residents' electric fences, gates and high-tech alarm systems don't work when the power is off. One woman was held up at gunpoint outside her stalled gate.

During blackouts in Johannesburg's Sandton City mall, which touts itself as Africa's most exclusive shopping center, the lights go dim, the shops close, would-be shoppers wander around in a daze, and shopkeepers sit in the doorways looking stormy. Traffic lights go out across the city, creating gridlock. In cinemas, movie screens go blank and patrons are left in the dark, sometimes just minutes from the end.

The blackouts are supposed to happen regularly, and people are told to go online to figure out when they will be without power. But in practice, it doesn't work that way. Some areas face blackouts several times a day, and sometimes the power outages last longer as Eskom tries to stabilize the situation.

Unless demand is radically curbed, South Africans can continue to expect similar crisis periods of "load shedding" for several more years. The government is trying to cut demand, especially household demand. A government minister suggested in Parliament on Wednesday that people drink less tea and coffee and go to bed earlier.

The power cuts sparked doom-laden headlines ("Back to the Dark Ages") and so many tales of woe from angry South Africans that one reader of the Star newspaper, Tshegofatso Motaung, wrote to the letters page: "I noticed something -- all of them were white. I finally realized that the reality of many poor South Africans is finally catching up with those who have been more comfortable." Power cuts, he said, were nothing new for most people.

South Africa accounts for more than half the electricity used in sub-Saharan Africa. After apartheid ended, the ANC doubled the number of households connected to electricity to 70% between 1994 and 1999.

But domestic use accounts for less than 20% of the total, with most power gobbled by manufacturing, mining and commercial users, and about 5% exported.

Philip Alves of the South African Institute of International Affairs had one word for the economic impact of the crisis: "Big." He said estimates of the damage ranged from $357 million to $1.2 billion a day but added, "It's impossible to calculate how much GDP is lost until you have gone through the process.

"Then there's the perception effect, which is hugely important," he said, noting the concern among foreign investors. "I think the indirect effect will be unpleasantly large."

Gaunt said part of the problem was that South African electricity prices, among the cheapest in the world, sent the wrong message to users. For the poor, 50 kilowatt hours a month is free.

The government wanted private investors to step in, a vain hope, according to analysts, because they could not have competed with Eskom's unrealistically low tariffs.

Until recently, business analysts were convinced that foreign investment in South Africa could only go up. Now that's all in doubt, because investors want reliable power for production.

Eskom has called on businesses to cut electricity use by 15% to 20% and suggested quotas to cut demand, with hefty fines or power disconnection for those who use too much power.

"Demand quotas would have disastrous consequences if implemented in the way I am hearing it," Gaunt said. "You [need to] implement them in a way that sends a good signal and modifies people's behavior. If one suddenly slaps rationing on industry and commerce the whole year round, we are going to turn off the tap on all industry very quickly."

Cornelis van der Waal, an analyst at Frost & Sullivan, a global growth consultancy, said the crisis would undermine South African firms' international competitiveness and deter investment.

"It's going to be hard for South African firms to come back and say, 'Oh we are back on the map now,' " he said. --